Sebi to revamp norms to ensure fairness for AMCs
Sebi) on Tuesday approved a proposal to increase participation from non-resident Indians (NRIs) and Overseas citizens of India (OCIs) through the foreign portfolio investor(FPI) route in local markets.
The board also cleared a proposal to simplify norms for passive schemes of domestic mutual funds allowing exposure to securities of group companies of the sponsor.
FPI
The regulator said such FPIs with NRIs and OCIs as clients should be based out of International Financial Services Centres (IFSCs) in India and regulated by the International Financial Services Centres Authority (IFSCA).
“The flexibility for such increased participation shall be subject to certain conditions to manage regulatory risk,” Sebi said in a press release after the voard meeting.
It would allow 100% contribution limits provided FPIs submit copies of PAN Cards of all their NRI and OCI investors, along with their economic interest in the FPI to the custodians.
If an investor doesn’t have a PAN, the FPI should give a suitable declaration along with other prescribed identity documents.
Similar disclosures would also be required in case of indirect holding in the FPI through firms or vehicles that are majority controlled by NRIs and OCIs on a look through basis, Sebi said.
“SEBI’s decision to permit upto 100% NRI and OCI participation, from the current less than 50% permissibility exclusively for IFSCA regulated FPIs, will augur well for onshoring of India focused offshore public market funds in IFSCs,” said Tejesh Chitlangi, joint managing
